Church’s Investment Power May Have More Influence Than Religious Beliefs In Modern Society

Church of England raises doubts over its future investments in major oil companies

It seems that the Church of England may
be able to exert more influence these days on the major global corporations, through
threatening to withdraw their expansive investments in such as large oil
corporations like BP and Shell, than they may be able to do through purely
religious methods and teachings alone in modern society.

The recent news that the Church has made
it be known that they want to see the oil companies increase their efforts to tackle
climate change, represents a thinly veiled accusation that they feel that they
are dragging their heels at present. By warning them in advance they clearly
hope to alter the stance being taken by the companies without having to actually
withdraw what they clearly see as valuable elements in their substantial
#Investment portfolio. By maintaining an investment presence, they feel they can
more ably influence and in effect ‘guide’ company behaviours than by merely
selling their stakes. The fact that in total the Church has a portfolio somewhere
in the region of £9 billion is clearly enough to have some business ‘clout’
would one think and be able to apply pressure to meet their own expectations
around the business direction of the companies they invest in. Particularly so,
if (when as shareholders) they act in a collaborative way with other investors
and can call for resolutions to press for matters to be addressed at such as the
annual AGM (which for BP is next April). By staying as large-scale investors they
also have the potential to sway any move for a ‘no confidence’ vote when asked,
should they see a benefit in that more ‘draconian’ approach.

Edward Mason, a key influencer on the
management of the Church’s investments, through his role as head of responsible
investment at the Church Commissioners, has a desire for “environmental and
social metrics” to form part of the formula determining executive pay in the
future. By doing so, it would be in everyone’s (vested) interest to ensure a
‘greener approach’ to the business to ensure that executives do not see their
remuneration packages suffer adversely, through unsatisfactory key performance
indicator measurements.

It is believed that the Church has
direct investments in the region of the tens of millions of pounds in the two
companies, who it sees as having the greatest carbon footprint in the UK. They
are clearly angered at the lack of action and are keen to press the companies
to be ‘greener’ in their outlook in the future, as they seek to avoid the
perceived harmful effects from climate change.

There is a precedent for the Church to
withdraw their investment when it feels sufficiently aggrieved, such as the
decision it made in 2012 when it sold an existing stake in News International.
The complaint on that occasion was that in the wake of the scandal caused by
phone-hacking, they did not see clear evidence of sufficient plans for reform
being put in place or as it was termed at the time the lack of “corporate
governance reform”.

In days gone by, the moral stance and
religious convictions would have been the Church’s key weapons to bring about
change, but it seems that wielding their financial levers may be a more
demonstrable method to influence those it sees as acting against the good of
the people and their planet these days.
They are in keeping with a general move over recent years for all major
companies to be seen to be more eco-friendly in their outlook and many are keen
to push their own ‘green’ credentials, in much the same way as they produce
their financial accounts each year. Pensions funds are another area where a keen
eye has been kept on how these are invested in recent years, with many deciding
to be more selective in their choices should they disagree with where the money
is placed, and those providing the highest returns are not always the ones
chosen.

BP have responded by suggesting that
they will consider the challenge put to them by the Church before the next AGM,
whereas Shell have previously hinted at their potential consideration of
similar by recognising that renewable energy does indeed have a large role to
play in the future.#Finance#Religion

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